【AEW webinar】Policy Impacts & "A Unified Welfare Analysis of Government Policies"

  • 研討會日期 : 2021-08-19
  • 時間 : 08:30
  • 主講人 : Professor Nathaniel Hendren
  • 地點 : online
  • 演講者簡介 : Professor Hendren received his Ph.D. in Economics from Massachusetts Institute of Technology in 2012. He is a Professor of Economics at Harvard University and a Founding Co-Director of the Equality of Opportunity Project. His work is motivated by the question: Do markets provide opportunity? He uses a combination of theoretical and empirical analysis to document the extent of equality of opportunity, understand when and why markets may fail to provide it, quantify the impact of these market failures, and provide tools to normatively evaluate potential policy solutions.
  • 演講摘要 : We conduct a comparative welfare analysis of 133 historical policy changes over the past half-century in the United States, focusing on policies in social insurance, education and job training, taxes and cash transfers, and in-kind transfers. For each policy, we use existing causal estimates to calculate both the benefit that each policy provides its recipients (measured as their willingness to pay) and the policy’s net cost, inclusive of long-term impacts on the government’s budget. We divide the willingness to pay by the net cost to the government to form each policy’s Marginal Value of Public Funds, or its “MVPF”. Comparing MVPFs across policies provides a unified method of assessing their impact on social welfare. Our results suggest that direct investments in low-income children’s health and education have historically had the highest MVPFs, on average exceeding 5. Many such policies have paid for themselves as governments recouped the cost of their initial expenditures through additional taxes collected and reduced transfers. We find large MVPFs for education and health policies amongst children of all ages, rather than observing diminishing marginal returns throughout childhood. We find smaller MVPFs for policies targeting adults, generally between 0.5 and 2. Expenditures on adults have exceeded this MVPF range in particular if they induced large spillovers on children. We relate our estimates to existing theories of optimal government policy and we discuss how the MVPF provides lessons for the design of future research.