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Fiscal Difficulties of Cities, the Labor Market, and Health Care

In: Incentives and Limitations of Employment Policies on Retirement Transitions

Author

Listed:
  • John Hsu
  • Joseph Newhouse
  • Lindsay Nicole Overhage
  • Samuel Zuvekas

Abstract

We investigated labor force and health outcomes in cities experiencing fiscal difficulties to assess how those difficulties might impact their employees. We matched 23 cities with bond downgrades and 31 cities with stable bond ratings to sampling units in the Medical Expenditure Panel Survey. Starting the year before the downgrade and for the four subsequent years, the rate of separation from local public employment fell in the cities with downgrades relative to the comparison group. Self-reported health may have worsened, but there were no statistically significant effects on health care use or spending.
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Suggested Citation

  • John Hsu & Joseph Newhouse & Lindsay Nicole Overhage & Samuel Zuvekas, 2018. "Fiscal Difficulties of Cities, the Labor Market, and Health Care," NBER Chapters, in: Incentives and Limitations of Employment Policies on Retirement Transitions, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:14178
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    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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