The cost of complexity in the Medicare Part D market

Michael Keane, 26 May 2019

Launched in 2006, Medicare Part D allows beneficiaries to enrol in subsidised drug coverage plans sold by private insurers, but navigating the different plans can be complex and lead to sub-optimal choices.This column uses Medicare administrative data for 2006-2010 to understand the quality of consumer decision making in the Part D marketplace. It finds that the vast majority of elderly place too much weight on premiums relative to out-of-pocket costs, care a great deal about the particular combination of plan features, and are highly likely to choose the same plan every year regardless of changes in prices and alternatives.

Lessons from the Age of Mass Migration

Marco Tabellini, 25 May 2019

Recent waves of immigration in the US and Europe have triggered debate around the economic and political impact. This column uses evidence from migration of Europeans to the US in the first half of the 20th century to show that large cultural differences can incite anti-immigrant sentiment despite their positive economic impact. Therefore, policymakers should give due attention to cultural assimilation and cohesion policies.

The macroeconomic consequences of impaired money markets

Fiorella De Fiore, Marie Hoerova, Harald Uhlig, 25 May 2019

Money markets are an important source of short-term funding for banks, which rely heavily on them to cover their liquidity needs. But as this column shows, when money markets do not function smoothly, banks may have to deleverage or increase their holdings of liquid assets, leading to a decline in lending and output. This decline can be mitigated by central banks if they increase the size of their balance sheets.

Getting more women into politics: Evidence from India

Lakshmi Iyer, 24 May 2019

In India’s recently concluded 2019 national elections, under 10% of the candidates were women. This column examines the potential reasons behind this, and argues that improving women’s knowledge, self-confidence, voice, and mobility could have significant effects on their political participation. It finds no evidence of a role model effect whereby women winning in elections encourages future women candidates, however, and the evidence on whether quotas can improve future women’s political participation is inconclusive.

Leisure-enhancing technological change

Łukasz Rachel, 24 May 2019

How we spend our time is changing rapidly. This column argues that an important driver is leisure-enhancing innovation, aimed at capturing our time, attention, and data. Leisure-enhancing technologies can help account for both the rise in leisure hours and the decline in productivity observed across the industrialised world. Their nature carries important implications for the long-run viability of the platforms’ business models, for measurement of economic activity, and for welfare. 

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