Friday, September 14, 2007

City-provided Health Insurance in San Francisco

San Francisco has passed legislation that provides for city-funded health care for uninsured residents, regardless of immigration status. The city is counting on successful preventive care being cheaper than the acute care it already dispenses for free to this population, which is surely something of a risk.

Wednesday, September 12, 2007

Saving from developing countries and the trade imbalance

Fed chairman Ben Bernanke expressed concern about the sustainability of the U.S. trade deficit and the imported foreign saving it represents. Why are developing countries supporting higher consumption in industrialized countries by exporting their saving?

One explanation is the Demographic Dividend: the resources freed up by the reduction in dependency owing to declining fertility and family size during the demographic transition. As development proceeds, mortality typically falls first. As babies and infants begin to survive in greater numbers, while labor market opportunities for women typically expand, fertility falls. Declining fertility and reduced family sizes allows households to save more resources, fueling investment either domestically or abroad.

For how long will investment opportunities in the U.S. continue to appeal to foreign savers? Presumably for as long as U.S. productivity remains the highest in the world (or among the highest, depending on how you measure it), and as long as political stability continues.

Tuesday, September 11, 2007

September 11 and economics

We seek to find meaning in everything, and it is tempting as a policymaker or economist to attribute the terrorist attacks of September 11, 2001, to some particular motivation. An obvious candidate is the economic status and opportunity of groups that produce terrorists, but economists believe any connection between poverty and terrorism is probably weak at best.

As summarized here, researchers at the National Bureau of Economic Research have examined this question, whether development and terrorism are inversely related, and they have determined that the evidence of such a connection is weak. As Alberto Abadie remarks, political freedom is more closely related to terrorism.

Sunday, September 9, 2007

Immigration, Fertility, and Policy

Last Saturday the Times reported that a Chinese woman and her husband received asylum after a harrowing turn of events in 2006.

The couple had been residing illegally in the U.S., where she delivered two children, both U.S. citizens. Returning to China, she argued, would subject her to risk due to China's One Child Policy. When immigration officials tried to deport her in 2006, she miscarried twins, a personal tragedy and public relations disaster for the U.S.

Immigration and fertility policy are the two most overt types of population policies; countries can of course alter mortality as well. Seeing the two collide in an international setting like this reminds one of the fundamental questions of population science: what is the optimal population size?