Centives

The health care debate has subsided to an extent, but there are still those who wonder whether the additional costs to states of providing health insurance to their citizens is worth it. Researchers have been trying to figure out whether having health insurance changes people’s behavior significantly. Some of the issues they are interested in is if health insurance improves the health and happiness of those who have it. In Oregon, 10,000 additional people were enrolled in Medicaid out of an applicant pool of 90,000. Researchers then compared the behavior of those who were enrolled with those who were not. Those enrolled were 7.5% more likely to go to the hospital for treatment, 25% more likely to report themselves to be in “good” health, 32% more likely to report themselves as being happy, and they cut down on sick days by 15%. Those with health insurance were also far more likely to get preventative care, but were just as likely to go to the emergency room as those without health insurance.

Source: Slate

One business seems able to weather any kind of economic climate it finds itself in. What business is it? Law School. The New York Times recently ran an article about the economics of law school. It’s a fascinating article as it highlights the fact that law schools seem to defy economic principles – despite the fact that the job market for law school grads is weakening, law schools are raising their tuition rates. One might suspect that such a scenario would lead to less students applying to and attending law school, but this is not the case. Rather, law schools have shown little problem attracting students, with some schools even raising class sizes. In fact, many law schools are doing so well financially that they pay a “tax” to the university they belong to that serves to subsidize other aspects of the university that are unable to pay for themselves. Many have questioned what responsibilities a law school must have to protect its students – after all, is it ethical to increase the number of students when the job market they face upon graduation is worse than any other time in recent history, all the while charging them more than ever to attend? From the years 1989 to 2009, the cost of tuition has gone up 71 percent for college, while the cost of tuition has gone up 317 percent for law school. Law school rankings and bond rating agencies are listed as two causes for the behavior of law schools as they try to maintain a strong bottom line and gain greater prestige. This all leads to two questions – should law schools be looking out for the best interests of their students, and given the current scenario law school students find themselves in, is it worth it for them to attend?

Source: New York Times

The Economist notes that “America’s universities have raised fees five times as fast as inflation over the past 30 years” and yet “still the universities keep sending begging letters to alumni and philanthropists.” The Economist reports that Vance Fried of Oklahoma State University found a way to provide a first class education for just $6,700 a year. Some of the cost cutting techniques include:

• Separate the funding of research and education, and make sure that students are only paying for their education and not subsidizing the institution’s research.
• The student-teacher ratio should be increased. Both business and law schools achieve good results with higher ratios than those that currently exist at undergraduate institutions.
• Eliminate and consolidate programs that receive little interest from students.
• Reduce administrative costs that have risen by as much as 61%    in the last 15 years.

Read about other ideas and the universities that are seriously implementing them over here.

Source: The Economist

Malcolm Gladwell at The New Yorker took a look at the history behind the American mall. Some of the highlights include:

• Before the 40s American retailers would always have their storefronts face the street so that customers could look into the store and its displays. The revolutionary idea behind the mall was to have a plain exterior and a lively, energetic, air conditioned interior.
• Other innovations include two storey malls that shortened the distance that shoppers had to walk between any two stores; and an artificial town square park in the centre of the building.
• Malls often have transparent handrails so that there’s nothing to disrupt the view of the shoppers.
• Car parks are designed so that there are more parking spaces on higher floors than lower ones because “people flow like water” and are more likely to go down than up. Elevators and escalators are also normally placed at opposite corners so that shoppers have to make a full loop.

Click here to find out more about how Congress inadvertently revived malls soon after it seemed that their dominance in American retail would come to an end; the role that socialism played in their rise; and the anguish that the creator of the mall felt about the global trend that he started.

Source: The New Yorker

Via: Slate

Some people have been taking a look at the effects of the latest recession and subsequent recovery on both men and women and the differences between the two. It seems that men are doing better in the recovery, but also did worse during the recession. It’s an interesting topic to look at and can (and should) lead to questions as to why the differences exist in the first place. This article has some interesting data and charts.

Source: Economix Blog

It’s no secret that the U.S. is facing some terrible labor market conditions as the unemployment rate remains high, and many people are looking for a job with very little success. In these conditions, how much do you value a job offer? One organization seems to think that $2,500 is a good number, and if you are willing to pay it, they will guarantee you a job offer of $100,000/year or more! Sounds like quite a deal, right? Well, of course, there’s a catch. This organization, called TheLadders, is only opening this offer up to certain job applicants who meet their requirements. These requirements aren’t exactly clear, but it does involve a screening process. TheLadders is a job search company that targets high paying jobs and the type of workers that tend to occupy them. In this article, the question of, “Are these the people who really need help finding a job?” is raised, and the answer, based on the data, seems to be no. Nonetheless, if you happen to have a stellar resume, an extra $2,500 lying around, and are willing to jump through a few hoops to prepare you for the job search, then this offer may just be what you’re looking for.

Source: Slate Magazine

Does greater economic development lead to happiness? Justin Wolfers, blogging on Freakonomics, thinks so. It seems like “money doesn’t lead to happiness” has become a common belief for many people. Why is that? Well, Wolfers seems to believe that the rich believe this in an attempt to convince themselves that the money they spend for luxury items and services doesn’t make them feel guilty for not spending on those in need. Of course, this debate is probably more complex than what his blog post tries to break it down to (what is happiness after all?), and his explanation for why we hold our beliefs on the correlation between money and happiness could certainly be questioned, but it’s hard to deny the notion that greater economic development could only help the lives and happiness levels of those affected.

Source: Freakonomics Blog