Econ 132 Petre

head start: fostering parental involvement

- parents increase time sent reading to child by 20% -absent fathers spend 1 more day a month with the kid -gains more substantial for back and hispanic children *reason= stucture of family. maybe more extended family takes care of kids

crowdout facts

many newly eligible people didnt sign up for medicaid becayse they already have health insurance -but many may have dropped to get medicaid -overall 20-50% crowdout

WIC: eligibility

must be within 185% of the poverty line or become eligible through medicard, tanf, snap: -pregnant women -post partum with child under six months -breastfeeding child under 12 months -infants -children under 5

unemployment insurance example:

other ways to insure against unemployment: -own savings -borrow money -other family members work more -transfers *unemployment insurance provides benefits through the replacement rate (ratio of unemployment insurance benefits to pre unemployment earnings)

head start: the impacts of expanding access to highquality preschool education- notes

preschool for all -idea: dramatic increases in the number of four year olds in public preschool programs and increased quality of programs nationwide -free for low- and moderate income families and accessible to children from higher- income families at rates determined by the states -modelled after universal preschool in oklahoma and georgia bonus: parents can work more

WIC

provides food and nutritional counseling -idea is to provide additional assistance at critical times -food packages come in the form of vouchers to use at a grocery store -small pilots began in 1972 and widespread access by 1979

head start benefits and cost summary

short run: higher cognitive and non-cognitive skills.. but costs of services long run: higher future after tax lifetime earngings and better health outcomes, lower criminality

WIC: selection into the program might not be random. why?

some participants might not know about it this study uses variation in WIC introduction across geographic areas over time -a difference in difference: -treatment country adopts WIC in a given year -control county has yet to adopt WIC See differences: in 1979 more counties have WIC. we can see that countries where the authors are missing information are similar to those with complete information -finds that when WIC is made available before the third trimester, an increase in infant birthweight, decrease in probability that an infant is classified as low birthweight

medicaid evolution

started as a small program that covered only some of the poorest people to being a central part of the health care system in the US

medicaid: CHIP (childrens health insurance program)

-program introduced in 1997 to expand the eligibility of children for public health insurance beyond the existing limits of the federal poverty line why would we want more funding? to invest in the future of the kids. people under 18 years olds cant provide their own. probably cant work.

four types of moral hazard play an important role

-reduced precaution entering the adverse state -increased odds of entering the adverse state -increased expenditures when in the adverse state -supplier responses to insurance against the adverse state

what health insurance does medicaid cover

-required to cover physician and hospital care -states also cover dental and prescription charges

WIC: Weathering the Storm: Hurricanes and Birth Outcomes- Notes

-stress during pregnancy can have negative effects on an unborn child -weather events can cause stress, especially to lower income women -another source of stress: food insecurity -this paper uses weather data to look at the impact of severe storms and hurricanes on pregnant women possible negative conditions that could result -injury -disruptions in supply of clean water -inadequate access to safe food -exposure to toxxins -interruption of healthcare -crowded shelter conditions -all of these might negatively impact pregnancy and infant health

3 main periods of medicaid: period 1

1. early period (1965-1980s) -characterized by strict limits on eligibility ∗ Goals: provide access to medical care to those who were the neediest members of society ∗ Initially, required to be eligible for AFDC (income and resource test, far below poverty line) (predecessor to TANF) ∗ Variation across states: both in participation and requirements ∗ Stringent edibility requirements for disabled, elderly ∗ Federal requirements: inpatient and outpatient hospital services, laboratory and x-ray services, physicians' services, skilled nursing facilities

medicaid eligibilty rules

1. everyone 18 and younger, up to 100% of poverty line... so states could pick more like 120% 2. children uner age 6, pregnant women, 133% of poverty line -in most states eligibility extends further for both childen and pregnant women (typically cover up to 200% of poverty line

headstart participation

100% of spots are filled.. which means everyone is doing it that can

does medicaid increase insurance take up?

1982-2000 huge increase in eligibility -only 10-25% of newly eligible people actually signed up

3 main periods of medicaid: period 2

2. early 1980s and before the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), when eligibility started expanding Changing edibility: linked to federal poverty line (rather than AFDC) and no family structure requirements (could be a two parent household) ∗ WHAT WOULD THIS DO TO COSTS? ∗ Substantial differences across states in coverage by child age-more generous for younger kids ∗ WHY MIGHT THIS HAPPEN?

3 main periods of medicaid: period 3

3. Current period: passage of PRWORA and including the ACA (Affordable Care Act) PRWORA: ∗ Elimination of AFDC and replacement with TANF changed Medicaid eligibility ∗ TANF families not automatically eligible ∗ Introduction of CHIP: State Children's Health Insurance Program ∗ WHY TARGET CHILDREN? ACA: standardized the way income is counted across states, and which family members are included in the family unit whose income is being combined

adverse selection

= insuranced individuals know more about their risk level than the insurer might want to know, as a result leading to those more likely to have the adverse outcome to select insurance leading insurers to lose money if they offer insurance ex. smoking and health insurance

intro: states of the world

= set of outcomes that are possible in an uncertain future ex. no way to know how unhealthy you'll be in the future

ch 12: Why does the government mandate individuals to purchase their own insurance in some cases—such as automobile liability insurance—but directly provide insurance to people in other situations—such as health insurance?

In contrast, redistributional concerns can argue in favor of mandates for some types of insurance and direct public provision (social insurance) for others. To see why, note that firms tend to charge higher premiums to individuals they can identify as having higher risks of accidents. In providing social insurance, the government can effectively pool different risk types together so that high-risk and low-risk individuals pay the same "premiums" (taxes) for social insurance. Hence, social insurance can make high-risk individuals better off than they would be with a mandate; similarly, it can make low-risk individuals worse off. This sort of redistribution may be more desirable in some contexts than others. In health insurance, for example, "high-risk" individuals are the people unlucky enough to be sick or injured. Redistributing toward these individuals may be normatively desirable. In contrast, the "high-risk" individuals in auto insurance markets are the reckless drivers. It may seem less desirable to redistribute away from the safe drivers toward the reckless ones. This provides a reason to use social insurance for health insurance but mandates for auto insurance. Another potential reason to use social insurance instead of mandates is the administrative cost differences between private provision and direct public provision. Larger differences (in favor of public provision) argue in favor of using social insurance instead of mandates. It may be that differences in administrative costs are quite large for medical insurance (hence direct provision) and small for auto insurance (hence mandates).

ch 12: Billy Joe has utility of U = log(C), while Bobby Sue has utility of U = √C. Which person is more risk averse? Which person would pay the higher insurance premium to smooth consumption?

It is not obvious from looking at the two utility functions which is more risk averse. A numerical example is helpful. Consider starting from a wealth of 100 and having a 50% chance of losing 90. Billie Joe's expected utility is 12log(100) + 12log(10) ≈ 3.45. The amount of (riskless) wealth Billie Joe would need to have to be just as well off solves log(WBJ ) = 12log(100) + 12log(10), or WBJ = exp(3.45) ≈ $31.62. Bobby Sue's expected utility is 12(100)0.5 + 12(10)0.5 ≈ 6.58. The amount of (riskless) wealth Bobby Sue would need to have to be just as well off solves (WBS) 0.5 = 6.58, or WBS ≈ 43.31. This means that Billie Joe is more risk averse than Bobby Sue; Billie Joe would be willing to pay up to a 68.38 to fully insure himself, while Bobby Sue would be willing to pay only up to 56.69. Equivalently, note that the 50% risk of losing 90 is "like" losing 68.38 (100 = 31.62) for Billie Joe and like losing only 56.69 for Bobby Sue; the same risk hurts Billie Joe more.

ch 16 11. In response to the State Children's Health Insur- ance Program in 1997, 37 states (including the Dis- trict of Columbia) expanded Medicaid coverage to children in families below 200% of the poverty line, with even higher thresholds in some states. a. In some of these states, the eligibility expan- sions have covered all children. How would you design a quasi-experimental analysis to evaluate the impact of these expansions? b. In other states, the eligibility expansions cov- ered only certain age groups of children. How could you design a quasi-experimental analy- sis to evaluate the impact of these expansions? How could you make this more convincing than the evaluation in (a)? Explain

a) As is the case with any program that varies by state, this situation offers the opportunity to compare coverage trends in the 14 states (51 minus 37) that did not expand coverage with trends in the 37 that did. As long as there weren't other trends that differed systematically between the 14 states and the 37 states, the trend in the 14 states can be used as a "control" for the 37 "treatment" states b)A concern about the approach in part a is that there may be systematic trend differences between the two types of states. Indeed, the states that chose to expand coverage may have done so because they had different trends. Using an "in-state" control to compare coverage trends of the unaffected age groups with the trends in the affected age groups may assuage these concerns. It would be particularly convincing to use both the cross-state and within-state control groups. Suppose, for example, one could show that trends in the 14 "control" states and in the 37 "treatment" states were the same for the age groups that were unaffected by the change in the treatment states (as in a difference-in-differences framework). This would provide strong evidence that the 14 states are a good control, and differences in coverage trends among affected age groups in these two types of states could be convincingly attributed to the coverage expansions.

ch 12: Suppose that you have a job paying $50,000 per year. With a 5% probability, next year your wage will be reduced to $20,000 for the year. a. What is your expected income next year? b. Suppose that you could insure yourself against the risk of reduced consumption next year. What would the actuarially fair insurance premium be?

a. The probability that your income next year will be $50,000 is 0.95; the probability that your income next year will be $20,000 is 0.05. Summing the expected values of the outcomes yields 0.95($50,000) + 0.05($20,000) = $47,500 + $1,000 = $48,500. This is your expected income next year. b. An actuarially fair premium would be one that exactly offset the expected value of the loss. In this case, the expected loss is $50,000 - $48,500 = $1,500, so an actuarially fair premium would be $1,500. Another (equivalent) way to determine this premium is to calculate the expected value of the claims the insurance company would pay; here it is the probability of the loss occurring times the dollar value of the loss, or 0.05 ($50,000 = $20,000) = 0.05($30,000) = $1,500. A third (equivalent) way to determine the premium is to compute the expected profits to the insurance provider for any given premium P. Since the premium is surely paid and the insurance company pays you $30,000 with a probability of 0.05, the expected profits are given by P = 0.05($30,000). Actuarially fair premiums are those that 1 lead to zero expected profits; setting expected profits equal to zero and solving gives P = 0.05($30,000) = $1,500 again.

intro: what are social insurance programs

government interventions in the provision of insurance against adverse events ex. food stams financial aid -affordable housing -medicaid

low risk people's role in insurance

if low risk people have enough risk premium, they will subsidize high-risk people in a pooling equilibrium -risk premium: amount that risk averse individuals will pay for insurance above what is actuariallyfaire -pooling equilibrium: all types of people buy full insurance even though it is not fairly priced to all individuals -separating equilibrium: different types of people buy different kinds of insurance products designed to reveal their true types ex. health insurance markets -as health insurance becomes more expensive,healthy people leave, causing premiums to increase

p-value

if p-value is less than the significance level (.05) we reject the null -the pvalue gives the probability that t* is bigger than tC

t tests

if t* is bigger than t-critical (2), we reject the null. this means that the coefficient is significantly different from zero USE ABS VALUES

confidence interval

if zero is in the confidence interval, we cannot reject the null hypothesis *REJECT THE NULL IF THE INTERVAL DOES NOT CONTAIN ZERO

intro: what is social insurance?

in the preamable one of the roles of government is to ""promote general welfare"

WIC: GOAL

increase nutrition for low income pregnant and post- partum mothers, infants, and young children

intro: insurance key tie together

individuals value insurance to help with consuption smoothing across all possible states of the world

intro: why does the government provide insurance?

informational asymmetry leads to market failure

intro: what is insurance

insurance is a promise to make a payment in case of a particualr event in exchange for a payment of premiums ex. health, auto, life property -valuable because it helps individuals smooth consumption across states of the world

key takeaway from adverse selection example

insured individuals know more about their risk level than the insurer does, which might cause those more likely to hve an adverse event to buy insurance, leading insurers to lose money from offering insurance -selling to bth requires that low risk people subsidize higher risk people -lower risk people might not want to do this

intro: a more formal model of expected utility

suppose that an adverse event occurs with probability p, the expected utility is E(u)= (1-p) x U (consumption with no adverse event) + p x U(consumption with adverse event)

WIC: highschool vs non highschool mothers

the biggest impact is on those that are poorer and have "Less than HS WIC implementation... not a significant effect on women that had hs vs more than hs education we expect this bc they need it the most

information asymmetry:

the difference in information available to sellers and purchasers in the market ex. health insurer would care about "risky" behaviors like smoking

WIC: can targeted transfers improve birth outcomes

the goal of supplemental nutrition program for woman, infants, and children is to improve the nutritional well-being of low income pregnant/ post-partum mothers, infants, children under 5 this is a good group to target because they need it most, and we expect it to increase birth weight

WIC

the supplemental nutritional program for women -federal program, USDA FNS (us dept. of agri and food and nutrition service)

headstart impact study in a more positive light

-Head start is best evaluated when compared to the next best alternative home-care or other preschool programs -the mean effects of Head Start as measured by HSIS masks a variation in its benefits across groups of children' -"skill begets skill" predicts that the best students benefit the most from programs like Head Start (skills are cumulative and achievement inequalities will tend to increase over time) -"compensatory" theory predicts that children who struggle are the most likely to benefit -headstart leads to large gains in vocab skills, these gains in the lowest skill level -gains fade by first grade, but seem to be persistent through first grade for spanish speakers

moral hazard- the cost of insurance

-adverse actions taken by individuals or producers in response to insurance against adverse outcomes -this means that might not be optimal for the government to provide full insurance -

why is moral hazard costly?

-adverse behavior encouraged by insurance lowers social efficiency because it reduces the provisions of socially efficient labor supply -when social insurance encourages adverse events, which raise the costs of the program, it increases taxes and lowers social efficiency further -optimal social insurance should partially insure individuals against events

Intro: Funding trends in recent decades from 1953 to 2014

-defense: 69.4% to 17.4% -disabilbiltiy and unemployment: 5.0 to 14.7 -social security: 3.6 to 24.3 -heath: .4 to 26.4 -other: 21.6 to 17.5 -funding has shifted towards programs that promote general welfare -increased rapidly for social programs

reasons for government interventions in insurance markets

-externalities: vaccines have positive spillovers, car crashes negative spillovers -administrative costs: government run medicare has much lower administrative costs than private insurance -redistribution: governments may want to redistribute from healthy to sick -paternalism: governments may feel that people would choose to buy too little insurance for themselves *prevent monopolies *keep working people healthy

preschool for all findings

-for lower income children, evidence suggests increased time spent between mothers and children reading, impact on test scores through the 8th grade -higher income families: children leave private preschools and attend public preschool -for the least educated mothers, universal preschool has sharply increased the likelihood for preschool enrollment at age 4 -for higher income families, presence of universal preschool reduces the childcare expenditures -for lower income families, decline in time mother spends with children- but increase in quality of time together (like reading or talking and playing) -evidence shows lower income mothers work more as a result of universal preschool -for lower income children, find programs increase math and reading score through fourth grade, but the effects seem to fade out by 8th grade.

what determines moral hazard?

-how easy it is to observe that the adverse event has happened -how easy it is to change behavior to establish the adverse event

headstart impact study

-in 1998 congress mandated randomized evaluation of head start -5000 children, aged 3 and 4 to a head start center (treatment) and the rest denied (control)] *you cant give someone zero schooling because its not fair results: -heastart improved cognitive skills for both 3 and 4 year olds -results were small in magnitude; hard to say different from other 3 0r 4 year olds -observed gains in cognitive skills disappeared by kindergarten -no clear evidence improved noncognitive skills -basically it kinda seemed like headstart was not effective

medicaid cost effectiveness

-it costs medicaid 1 million per infant life saved through its expansions -this is much lower than the cost of alternative government interventions designed to save lives, such as food regulation or seat belt safety -this finding has policy implications: maybe investing in low-income health care could be a cost effective means of providing health in the US

head start overview

-largest federal early intervention and education program in the united states -serves almost 1 million children, ages 3 to 4, annual budget about 8 million (average 8000 per student) (families pay no money) -intendended to provide comprehensive programming in preschool to improve children's school readiness -attention to social and academic skills - health -wellness -parent engagement -over 3 types of services: learning, health, dental check ups, support and training for parents -limited to families with income below 100% of the poverty line *social skills goal: narrow gap at an early age with skills for low and high income people

head start: key facts

-leads to positive gains in vocabulary knowledge and receptive language skills during the preschool period (PARTICULARY FOR CHILDREN WITH LOW ACHIEVEMENT LEVELS AND SPANISH LANGUAGE SPEAKERS) -gains for spanish speakers from head start may persist into elementary school -head start does not seem to have short term impact on childrens social and emotional outcomes; it does have a longer term impact on wellbeing in early adolescence and young adulthood

health care utilization and health

-medicaid eligibility increases preventative care and reduces infant mortality

does medicaid improve healths?

-medicaid intended to provide heath insurance coverage to low income people, thereby improving their health -how might medicaid improve healths? -increased insurance coverage - lower prices mean increased access to care - might increase utilization -might lead to better health care - might increase preventative care

how to providers get paid?

-payment set by states -in most states medicaid reimbursement is low -many physicians refuse to see medicaid patients

ch 12: What is consumption smoothing? How does insurance help people smooth consumption?

Consumption smoothing refers to people's efforts to have approximately the same amount of consumption in all time periods, rather than having periods of high consumption and periods of low consumption. Insurance makes consumption smooth by taking away a relatively small amount of money in each time period, in the form of insurance premiums, but paying a substantial amount of money in the event of a loss. Thus, the insured has slightly less consumption in all periods, and if he or she suffers a loss, the insurance company pays a benefit that allows the insured to maintain his or her usual level of consumption.

headstart study

HSIS (Head start impact study) 2002 large scale program evaluation found small impacts that faded out quickly. -however many studies have found that these results mask significant variations in programs across centersm and it is possible to understand which groups of children headstart works best. trends: more and more children enrolled in public preschool programs l

ch 16: Describe the empirical evidence of the relationship between Medicaid expansions and improved children's health. How cost-effective have these Medicaid expansions been? Explain your answer.

Medicaid expansions have been successful and cost-effective in reducing infant mortality. There was an estimated 50% increase in preventive care, including early prenatal care, when Medicaid eligibility was expanded. The increase contributed to a large decrease in infant and child mortality. The decrease came at a cost of approximately $1 million per life saved, which is much less than the cost of other life-saving measures and well below most estimates of the statistical value of life.

ch 12: Currently, in order to receive workers' compensation, a claimant's injury claims must be verified by a physician of the claimant's choosing. Suppose that the workers' compensation policy changed so that only government-assigned physicians could verify injury claims. What is likely to happen to the rate of reported on-the-job injury? Explain

Requiring government-designated physicians to verify claims could increase the cost of obtaining injury verification for some potential claimants and so, on the margin, deter them from filing claims. This deterrence would occur if some workers had identified private physicians who were relatively more willing to verify an injury claim. If workers knew that their claims were only marginally legitimate and might not be validated by the government physician, they may hesitate to report injuries. Alternatively, if the government-designated physicians were inconveniently located or had inconvenient hours, legitimate claims might go unreported. In either case, reported on-the-job injuries would decline even if actual injury rates remained the same. On the other hand, if government physicians are more lenient, or are more convenient or inexpensive than private physicians, claims could increase.

ch 16: Beginning in the mid 1980s, there was a large expan- sion in the Medicaid eligibility of children. How do you think this affected the job-mobility of low to middle income parents? How could you test this?

This expansion should have increased job mobility. Prior to the policy change, many parents may have suffered from job lock where they felt that they were imperfectly matched to their job but couldn't easily quit to look for a new job for fear of losing insurance coverage for their children. Access to state-provided Medicaid would have eased this concern. One way to test this would be to see how job mobility changed as Medicaid was expanded. It is difficult to infer causality from time series analysis alone, however. For example, job mobility might have been expanding more generally over that time period. A better approach might be to compare the changes in job mobility of parents of newly eligible children to the changes in the job mobility of similarly aged workers without children.

ch 16: . When your governor took office, 100,000 chil- dren in your state were eligible for Medicaid and 200,000 children were not. Now, thanks to a large expansion in Medicaid, 150,000 children are eli- gible for Medicaid and 150,000 children are not. Your governor boasts that, under her watch, "the number of children without access to health care fell by one-quarter." Is this a valid statement to make? Why or why not?

This governor has erroneously equated new eligibility with new access, which is not quite correct for two reasons. First, it is not certain that the 50,000 newly covered children did not have access prior to the change; they may have had privately provided insurance. Empirical studies have shown that Medicaid crowds out some private insurance when eligibility is expanded because Medicaid offers more generous benefits than most private health insurance plans. Second, eligibility does not assure access. If reimbursement rates for providers under Medicare are low, they may refuse to care for the newly eligible children.

medicaid overview

federal program funded by general tax revenues, that provides heatlhcare for poor families, elderly, and disabled -federally mandated but administered by states: so there is some degree of freedom for states -most cost efficient on the local level -serves low income families, with different income thresholds in different states

ch 12: Your utility function is UU = √C where C is the amount of consumption you have in any given period. Your income is $40,000 per year and there is a 2% chance that you will be involved in a catastrophic accident that will cost you $30,000 next year. a. What is your expected utility? b. Calculate an actuarially fair insurance premium. What would your expected utility be were you to purchase the actuarially fair insurance premium? c. What is the most that you would be willing to pay for insurance, given your utility function?

a.Expected utility is the sum of the utility in each state weighted by its probability. Assuming consumption of your entire income, when income is $40,000, utility is 200; when income is $10,000, utility is 100. Therefore, expected utility is 0.98(200) + 0.02(100) = 198. b. The insurance company would expect to pay $30,000 each year to 2% of its customers, so over the population it would pay 0.02($30,000) = $600 per person. So $600 would be an actuarially fair premium. A person who purchased actuarially fair insurance would have utility in both states of √40, 000 − 600 ≈ 198.5, which is larger than 198. c. To answer this question, first go back to the original utility to determine how much money would yield the same utility as the expected utility of taking the risk. The wealth that would yield utility of 198 solves √ W = 0.98√40, 000 + 0.02√10, 000, so W = 1982 = $39, 204. You are indifferent between the risky situation and certain wealth of $39,204 because they yield the same utility. Therefore, you should be willing to pay $40,000 = $39,204 = $796 for insurance.

medicaid expansion for aca

aca put in program expansions and extended eligibility to all families, regardless of family structure, below 138% of the federal poverty line -generous coverage: little cost sharing and low premiums

WIC: administration

administered at the state level (Federal funding passed down to states)

expanding head start would be a good investment

benefit: effect of headstart on childrens future lifetime earnings- $5513 over lifetime cost side: costs to government funding, savings from reducted enrollment in other programs -these calculations show that the social returns to headstart are likely to be positive $1 on spending headstart generates $1.84 to $2.02 in future earnings

example of adverse selection

careless people: 5% chance of being in car crash (half of population) careful people: 0.5% change of being in car accident (half of population) -if insurance knew people types, they could charge separate prices -but if don't know types, would have to charge a price that is fair on average 1) if they charge fair price: -careless people: $1500, earn $150,000 per 100 careless people, pay out $150,000 -careful people: $150, earn 15,000 per 100 careful people, pay out $15,000 2)if they try to charge different prices but don't know who is careless -careless people pretend to be careful, pay 150 -careful people pay 250 *careless people: $150, earn $15,000 per 100 careless people, pay out 150,000 and lose 135,000 *careful people: 150$, earn 15,000 and pay out 15,000 3) if they try to charge average price -average price= 825 -careless people pay 825 because they care -careful people decline coverage *earn 82,500 per careless people and pay out 150,000 and lose 67500. *earn zerno from careful people

crowding out vs take up

crowd out= switching from private insurance to medicaid take-up= previously uninsured and then takes medicaid

intro: means tested programs

eligibility depends on the level of ones current income or assets means tested: financial aid, food stamps not means tested: social security

intro: model example

ex. sam has 1% chance of getting hit by car with 30k medical expenses. his insurance costs b for every dollar of coverage, so if he buys $m coverage, the cost is $mb -assume that his utulity function is U= square root of c FINNISH ADDING GRAPH CONCLUSION

using state medicaid expansion to estimate program effects

expansions between 1982 and 2000 could create a natural experiment for medicaids impact on health -if timing/magnitude differences in expansion -elibitiy rose faster in Missouri than in michigan

WIC: Weathering the Storm: Hurricanes and Birth Outcomes- Paper

this paper argues that hurricanes create stress for expectant mothers and results in a whole host of problems for newborns tying these results back to wic: -suppose that lower income expectant mothers are likely to have higher stress as a result of a hurricane or severe storm -we know this type of stress causes infant health problems -what wuold we expectto happen if pregnant women were able to gain access to WIC -is it possible WIC could offsset some of these negative efects

intro: consumption smoothing

translation of consumption from periods when consumption is high to periods when consumption is low ex. borrow to pay for college

difference in difference estimators

use when we want to compare people that receive the "treatment" to people that do not, where both groups are otherwise equal aka the 1 and 0 for men and women

instrumental variables

we use these when we care about the relationship between x and y, when the covariance does not equal zero