Working Papers

Early Withdrawal of Pandemic Unemployment Insurance: Effects on Earnings, Employment and Consumption (with Kyle Coombs, Arindrajit Dube, Calvin Jahnke, Suresh Naidu, and Michael Stepner) August 2021. Non-technical Summary.

Abstract: In June 2021, 22 states ended all supplemental pandemic unemployment insurance (UI) benefits, eliminating benefits entirely for over 2 million workers and reducing benefits by $300 per week for over 1 million workers. Using anonymous bank transaction data and a difference-indifferences research design, we measure the effect of withdrawing pandemic UI on the financial and employment trajectories of unemployed workers in states that withdrew benefits, compared to workers with the same unemployment duration in states that retained these benefits. In our data through August 6, we find that ending pandemic UI increased employment by 4.4 percentage points while reducing UI recipiency by 35 percentage points among workers who were unemployed and receiving UI at the end of April 2021. Through the first week of August, average UI benefits for these workers fell by $278 per week and earnings rose by $14 per week, offsetting only 5% of the loss in income. Spending fell by $145 per week, as the loss of benefits led to a large immediate decline in consumption.

Press: New York Times, The Economist, Washington Post, NPR, CNBC, Reuters, Business Insider, Yahoo

The Impact of Financial Assistance Policies on Health Care Utilization (with Alyce Adams, Neale Mahoney, Francis Wong, Jinglin Wang, and Wesley Yin) August 2021. Submitted.

Abstract: Most hospitals and managed care organizations have financial assistance programs that aim to reduce financial burdens and improve health care access for low-income patients. We use administrative data from Kaiser Permanente to study the effects of financial assistance on health care utilization. Using a regression discontinuity design based on an income threshold for program eligibility, we find that financial assistance significantly increases health care utilization initially, though effects dissipate three quarters after program receipt. Financial assistance increases the detection of and medication refills for treatment-sensitive conditions, suggesting financial assistance may increase receipt of high-value care.


Medical Debt in the US, 2009-2020 (with Neale Mahoney, Francis Wong, and Wesley Yin) JAMA 326(3), July 2021: 250-256.

Press: New York Times, Vox, Washington Post, Marketwatch, CBS Evening News, Marketplace, Full List of Outlets

The Economic Consequences of Bankruptcy Reform (with Tal Gross, Feng Liu, Matthew Notowidigdo, and Jialan Wang) American Economic Review 111(7), July 2021: 2309-2341. Online Appendix.

Abstract: A more generous consumer bankruptcy system provides greater insurance against financial risks but may also raise the cost of credit. We study this trade-off using the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which increased the costs of filing for bankruptcy. We identify the effects of BAPCPA on borrowing costs using variation in the effects of the reform across credit scores. We find that a one-percentage-point reduction in bankruptcy filing risk decreased credit card interest rates by 70–90 basis points. Conversely, BAPCPA reduced the insurance value of bankruptcy, with uninsured hospitalizations 70 percent less likely to obtain bankruptcy relief after the reform.

Press: New York Times (cited), NBER Digest

Myth and Measurement — The Case of Medical Bankruptcies (with Carlos Dobkin, Amy Finkelstein, and Matthew Notowidigdo) New England Journal of Medicine 378(12), March 2018: 1076-1078.

Press: New York Times, Associated Press, Newsweek, Washington Post, Washington Post (FactCheck)

The Economic Consequences of Hospital Admissions (with Carlos Dobkin, Amy Finkelstein, and Matthew Notowidigdo) American Economic Review 108(2), February 2018: 308–352. Online Appendix.

Abstract: We use an event study approach to examine the economic consequences of hospital admissions for adults in two datasets: survey data from the Health and Retirement Study, and hospitalization data linked to credit reports. For non-elderly adults with health insurance, hospital admissions increase out-of-pocket medical spending, unpaid medical bills, and bankruptcy, and reduce earnings, income, access to credit, and consumer borrowing. The earnings decline is substantial compared to the out-of-pocket spending increase, and is minimally insured prior to age-eligibility for Social Security Retirement Income. Relative to the insured non-elderly, the uninsured non-elderly experience much larger increases in unpaid medical bills and bankruptcy rates following a hospital admission. Hospital admissions trigger fewer than 5 percent of all bankruptcies in our sample.

Press: Washington Post (Wonkblog), New York Times, Vox

Beyond Statistics: The Economic Content of Risk Scores (with Liran Einav, Amy Finkelstein, and Paul Schrimpf) American Economic Journal: Applied Economics 8(2), April 2016: 195-224.

Abstract: In recent years, the increased use of “big data” and statistical techniques to score potential transactions has transformed the operation of insurance and credit markets. In this paper, we observe that these widely-used scores are statistical objects that constitute a one-dimensional summary of a potentially much richer heterogeneity, some of which may be endogenous to the specific context in which they are applied. We demonstrate this point empirically using rich data from the Medicare Part D prescription drug insurance program. We show that the “risk scores,” which are designed to predict an individual's drug spending and are used by Medicare to customize reimbursement rates to private insurers, do not distinguish between two different sources of spending: underlying health, and responsiveness of drug spending to the insurance contract. Naturally, however, these two determinants of spending have very different implications when trying to predict counterfactual spending under alternative contracts. As a result, we illustrate that once we enrich the theoretical framework to allow individuals to have heterogeneous behavioral responses to the contract, strategic incentives for cream skimming still exist, even in the presence of “perfect” risk scoring under a given contract.

Research in Progress

Pay-As-You-Go Insurance: Experimental Evidence on Consumer Demand and Behavior. AEA Pre-registration.

Abstract: I analyze the introduction of a novel pay-as-you-go insurance contract to uninsured drivers in the California auto insurance market. Drivers are randomly offered either the novel contract which offers flexible daily coverage terms or a traditional insurance contract. Among those offered the pay-as-you-go contract, we randomize prices (conditional on risk) and discounts for buying larger quantities of days. The pay-as-you-go contract increases insurance take-up by 12 percentage points (222 percent) and days with insurance available by 4 days over the 3-month experiment (87 percent), but coverage benefits erode over time. Demand for auto insurance is price-sensitive with an estimated elasticity of -1.21. The pay-as-you-go contract increased coverage in part by relaxing liquidity requirements for enrollment: purchasing behavior implies a cost of credit greater than 317 APR for at least 51 percent of drivers, 75 percent have $0 of available formal credit, and 18 percent of enrolled drivers have at least one purchase rejected for insufficient funds.

Effects of Pandemic Unemployment Policies on Consumption, Savings, and Incomes of Workers: Evidence from Linked Survey-Transactions Data (with Kyle Coombs, Arindrajit Dube, Calvin Jahnke, Suresh Naidu, and Michael Stepner)

Abstract: We present new results on the consumption, savings, and income effects of the introduction of the unusually generous unemployment insurance benefits during the COVID-19 pandemic in April, their abrupt expiration at the end of July, and their short-term partial reintroduction through August and September. We use a new dataset of administrative bank account balances and transactions verified for 1.2 million workers and 258,065 recipients of UI. We link these administrative data with a large-scale survey (N = 24,671) of expectations and economic preferences. We find that account outflows fell by 20% among July UI recipients in the 12 weeks since FPUC expiration relative to non-recipients. We find that consumption drops around expiration were muted owing to accumulated savings out of the expanded UI over the March-July period; end of July savings were roughly three times as large as savings in January. The magnitude of the drop in savings following the expiration was larger in households with low expectations of continuing benefits, no children, low risk aversion, and high discount rates. We also find that the temporary Lost Wages Assistance program provided a small but temporary boost to savings and consumption, and the timing of this boost varied based on the staggered adoption by states.

The Burden of Medical Debt and the Impact of Debt Forgiveness (with Neale Mahoney, Francis Wong, and Wesley Yin) In the field. Summary on J-PAL Website. AEA Pre-registration 1 (Old Debt). AEA Pre-registration 2 (New Debt).

Abstract: Medical debt is potentially a large burden for many Americans—with 44 million individuals holding an aggregate $75 billion in medical debt. While these nominal amounts are staggering, it is unclear to what extent medical debt threatens well-being. Recovery rates for medical debt in collections are low, suggesting that the pure “balance sheet” cost of medical debt is modest for most individuals. Yet medical debt may harm individuals financially through lower credit scores, higher interest rates, and reduced access to credit. Medical debt may also have non-pecuniary costs through negative impacts on mental and physical health, or by deterring individuals from seeking valuable health care. We implement a large-scale randomized control trial of medical debt forgiveness. The experimental treatment group is comprised of around 60,000 individuals who have received approximately $122 million in medical debt forgiveness. We measure financial outcomes using credit bureau data and health and healthcare utilization outcomes using mail-in surveys.

Press Coverage of Intervention: New York Times, CNN, Indy Star, NPR, NBC News, PBS News Hour, Axios, Consumer Reports

Technology and Targeting: Accessing Bankruptcy Relief without Attorneys

Abstract: Barriers to accessing government assistance affect who receives benefits. Filing for consumer bankruptcy is expensive, many potential filers are liquidity constrained (Gross, Notowidigdo, and Wang, 2014), and only a fraction of individuals who would benefit from filing for bankruptcy do so (White 1998). This paper explores the potential of a novel financial and legal technology to alter who accesses bankruptcy relief, surveys prospective filers on the causes of their financial distress, and considers the implications for the targeting and efficiency properties of the consumer bankruptcy system.

Press Coverage of the Prospective Filers Survey: NBC News

Resting Papers

Bankruptcy and the COVID-19 Crisis (with Jialan Wang, Jeyul Yang, and Ben Iverson). September 2020. See my coauthors' webpages for updated versions of this paper.

Abstract: We examine the impact of the COVID-19 economic crisis on business and consumer bankruptcies in the United States using real-time data on the universe of filings. Historically, bankruptcies have closely tracked the business cycle and contemporaneous unemployment rates. However, this relationship has reversed during the COVID-19 crisis thus far. While aggregate filing rates were very similar to 2019 levels prior to the severe onset of the pandemic, filings by consumers and small businesses dropped dramatically starting in mid-March, contrary to media reports and many experts' expectations. The total number of bankruptcy filings is down by 27 percent year-over-year between January and August.

Press: Wall Street Journal, The Economist (Daily Chart), Oxford Business Law Blog, Promarket at Chicago Booth

Information Frictions and Insurer Plan Design: Evidence from Medicare Advantage (with Evan Mast)

Abstract: Behavioral frictions in insurance exchanges affect not only the plan a consumer selects, but also the menu of plans insurers offer. We investigate an information friction in Medicare Advantage—beneficiaries pay two premiums, and one is much more salient. We find a larger demand elasticity for the salient versus non-salient premium. A model of insurer plan design produces simulated premiums matching the observed distribution using these “behavioral” elasticities, but not when assuming equal elasticities across the two premiums. Removing the friction increases enrollment in low-premium plans, increasing consumer surplus $5 per year with supply fixed and $73 per year when including a supply response.