Medicare Part D plans provide prescription drug coverage to 45 million seniors. The recent past has seen significant consolidation amongst plan providers, notable CVS's 2018 acquisition of Aetna and Cigna's 2018 acquisition of Express Scripts. In this paper, we analyze the effect of consolidation of standalone Part D plan providers on premiums using plausibly exogenous variation in concentration induced by the 2011 merger between CVS and Universal American. We find that the increase in concentration for standalone Medicare Part D plans that resulted from this merger led to higher average premiums, a total of nearly $170 million per year. We find further that, consistent with the assumptions behind standard antitrust practice, the effects of the increase in concentration were heterogeneous: moderately (or more) concentrated markets that saw a meaningful increase in concentration saw significant increases in premiums, while premiums in other markets did not change significantly.

Despite facing some of the same challenges as private insurance markets, little is known about the role of adverse selection in Old-Age Social Security. Using data from the Health and Retirement Study, we perform the unused observables version of the positive correlation test, and find robust evidence that people who expect to live shorter lives both choose smaller annuities – by claiming benefits early – and are less costly to insure, implying adverse selection in the system. Results are consistent when using either subjective expectations or observed longevity. Decomposing the sources of adverse selection we find that health, demographics, occupation and financial information together account for much of the positive correlation between mortality and claiming. IV estimates help to rule out moral hazard.

We use 20 years of Italian administrative panel data to identify the role of ability in migration from south to north. Using a novel iterative estimation method for a switching regression model with the same worker-specific source of unobserved heterogeneity in selection and outcome equations, we find that returns to ability are lower in the north than the south. Accordingly, migrants are drawn from the lower half of the ability distribution. Higher wages and employment rates each account for around half the gains from migration. Return migration reinforces the original negative selection of migrants, consistent with migrants facing considerable uncertainty.

Understanding the determinants of migration patterns and the selection of migrants is of paramount importance in a world in which over 240 million people have migrated and many more are considering doing so. This paper adds to the literature on this topic by (i) using micro-level wage data for a large number of source and destination countries, and (ii) identifying the impact of bilateral variables, e.g. distance, and source and destination country characteristics using a two-step estimation strategy that allows for estimation over a full matrix of migration corridors and better addresses the issue of multilateral resistance to migration. The results highlight how geography (distances, contiguity and country size) and wage differentials matter for determining migration flows and the differential selection of low and high skilled migrants.JEL Codes: F22, F66, J61.

The World Bank Economic Review 32 (1) (English).

The perception that immigration fuels crime is an important source of anti-immigrant sentiment. Using Malaysian data for 2003-10, this paper provides estimates of the overall impact of economic immigration on crime, and evidence on different socio-economic mechanisms underpinning this relationship. The IV estimates suggest that immigration decreases crime rates, with an elasticity of around -0.97 for property and -1.8 violent crimes. Three-quarters of the negative causal relationship between immigration and property crime rates can be explained by the impact of immigration on the underlying economic environment faced by natives. The reduction in violent crime rates is less readily explained by these factors.

The perception that immigration fuels crime is an important source of anti-immigrant sentiment. Using Malaysian data for 2003-10, this paper provides estimates of the overall impact of economic immigration on crime, and evidence on different socio-economic mechanisms underpinning this relationship. The IV estimates suggest that immigration decreases crime rates, with an elasticity of around 0.97 for property and -1.8 violent crimes. Three-quarters of the negative causal relationship between immigration and property crime rates can be explained by the impact of immigration on the underlying economic environment faced by natives. The reduction in violent crime rates is less readily explained by these factors. JEL classification: F22, K42

TalentCorp Malaysia runs the" Returning Expert Programme"(REP), a government program designed to encourage Malaysian professionals abroad to return home through use of various incentives. The REP is intended to combat the" brain drain," caused by highly educated professionals moving away to take advantage of better career opportunities by offering returnees benefits such as tax breaks and permanent residency for family members. In 2011, TalentCorp took over administration of the REP, and through adjustments to incentives and application requirements was able to dramatically increase the number of REP applicants and approvals. Now they are considering another set of changes and must demonstrate that their changes will increase" bang for the taxpayer buck," raising the number of applicants while maintaining the same level of quality.

This paper presents the first evidence on the efficacy of a major program designed to encourage the return migration of high-skilled individuals.The Malaysian Returning Expert Program targets high-skilled Malaysians abroad and provides them with tax incentives to return.At several eligibility thresholds, the probability of acceptance into the program increases discontinuously.Using administrative data on applicants, the analysis is able to identify the impact of acceptance to the Returning Expert Program on the probability of returning to Malaysia.The fuzzy regression discontinuity design estimates suggest that program approval increases the return probability by 40 percent for applicants with a preexisting job offer in Malaysia.There is no significant treatment effect for those who apply without a job offer.The estimated migration elasticity with respect to the net-of-tax rate, averaged across all applicants, is 1.2.Fiscal cost-benefit analysis of the Returning Expert Program finds a modest net fiscal effect of the program, between minus $6,900 and plus $4,200 per applicant, suggesting that the program roughly pays for itself.

This paper exploits a combination of policy variation from multiple pension reforms in Austria and administrative data from the Austrian Social Security Database.Using the policy changes for identification, we estimate social security wealth and accrual elasticities in individuals' retirement decisions.Next, we use these elasticities to estimate a dynamic programming model of retirement decisions.Finally, we use the estimated model to examine the labor supply and welfare consequences of potential social security reforms.

The information contained in this summary report reflects the analysis and assessment that have been undertaken beginning January 2013 mainly to assess the effectiveness of TalentCorp’s efforts to attract and retain global talent through its Returning Expert Program (REP) and Residence Pass-Talent (RP-T). The initial research included various activities aimed at improving the client’s ability to meet its mandate. The main activities completed were as follows: (1) creation of a platform to identify and monitor local labor market conditions and human capital/talent needs; (2) creation of a profile of the Malaysian diaspora living abroad; (3) creation and implementation of two surveys, both surveys focused on gauging the attractiveness of working in Malaysia and were targeted at the Malaysian diaspora and foreign talent living in Malaysia; (4) an impact evaluation of the REP, which aims to facilitate highly skilled members of the Malaysian professionals abroad back to Malaysia; and (5) an assessment of the effectiveness of the RP-T Program, which aims to retain foreign talent in Malaysia. In both the impact evaluation and the assessment, the main questions investigated are whether these programs effectively attract/retain talent.

How natives adjust is central to an understanding of the impact of immigration in destination countries. Using detailed labor force data for Malaysia for 1990-2010, we provide estimates of native responses to immigration on multiple extensive margins and rare evidence for a developing country. Instrumental variable estimates show that increased immigration to a state causes substantial internal inward migration, consistent with the fact that immigration increases the demand for native workers. Relocating Malaysian workers are accompanied by their spouses (three-quarters of whom are housewives) and children who attend school. We find that these effects are concentrated among middle- and lower-skilled Malaysians.

This paper presents the employment patterns of foreign workers in Malaysia using two key datasets, the Malaysian Labour Force Survey and the Economic Census, which are compiled by the Department of Statistics of Malaysia. The datasets provide complementary individual-and firm-level information about the employment of foreign workers and offer a comprehensive picture of the utilisation of foreign labour in the country. The datasets discussed should be useful for other researchers to further explore the questions raised in the paper.

Currently 2.5 million Syrians fleeing war have found refuge in Turkey, making it the largest refugee-hosting country worldwide. This paper combines newly available data on the distribution of Syrian refugees across Turkey and the Turkish Labour Force Survey to assess their labor market impact. Syrian refugees are overwhelmingly employed informally, since they were not issued work permits, making their arrival a well-defined supply shock to informal labor. Consistent with economic theory our instrumental variable estimates, which also control for distance from the Turkish-Syrian border, suggest large-scale displacement of natives in the informal sector. At the same time, consistent with occupational upgrading, there are increases in formal employment for the Turkish - though only for men without completed high school education. Women and the high-skilled are not in a good position to take advantage of lower cost informal labor. The low educated and women experience net displacement from the labor market and, together with those in the informal sector, declining earning opportunities.

The impact of immigration on native workers is driven by two countervailing forces: the degree of substitutability between natives and immigrants, and the increased demand for native workers as immigrants reduce the cost of production and output expands. The literature so far has focused on the former substitution effect, while ignoring the latter scale effect. This paper estimates both of these effects using labor force survey data from Malaysia (1990-2010), a country uniquely suited for understanding the impact of low-skilled immigration. The instrumental variable estimates imply that the elasticity of labor demand (3.4) is greater than the elasticity of substitution between natives and immigrants (2.5). On average the scale effect outweighs the substitution effect. For every ten additional immigrants, employment of native workers increases by 4.1 in a local labor market. These large reallocation effects are accompanied by negligible relative wage changes. At the national level, a 10 percent increase in immigrants, equivalent to 1 percent increase in labor force, has a small positive effect on native wages (0.14 percent). The impact of immigration is highly heterogeneous for natives with different levels of education, resulting in substantial changes in skill premiums and hence inequality. Immigrants on net displace natives with at most primary education; while primarily benefiting those with a little more education, lower secondary or completed secondary education.

Despite facing some of the same challenges as private insurance markets, little is known about the role of adverse selection in Old-Age Social Security. Using data from the Health and Retirement Study we nd robust evidence that people who live longer both choose larger annuities - by delaying the age they rst claim benets - and are more costly to insure, evidence of adverse selection. To quantify welfare consequences we develop and estimate a model of claiming decisions, nding that adverse selection increases costs to the system and reduces social welfare by 1-3 percent. Our results are robust to extending the choice set to include disability insurance, observed and unobserved heterogeneity in Social Security annuity valuations, and the endogeneity of longevity expectations. The estimates imply that increasing the pension accrual rate, by decreasing the adjustment factor for early retirement, would yield substantial costs savings and by encouraging more ecient sorting, slightly increasing social welfare. In contrast, the cost savings from increasing the full retirement age are accompanied by signicant reductions in social welfare. A mandate eliminating the choice to claim early, while resulting in large cost reductions, is even less desirable: it would entail large social welfare losses and a 50 percent increase in the number of people claiming disability insurance.

We use twenty years of Italian administrative panel data, a uniquely rich source of information on internal migration experiences, to identify the role of unobserved worker characteristics in the selection and returns to migrants. We propose and implement a novel iterative estimation method for a switching regression model with the same worker-specific source of unobserved heterogeneity (ability) present in the selection and both outcome equations. We estimate that the returns to ability are lower in the North than in the South of Italy and accordingly migrants tend to be drawn from the lower-end of the ability distribution. Around half the gains to migration are due to higher wages, and the other half due to greater labor market attachment. Differential returns to observable characteristics are far less important. Return migration reinforces the original negative selection of migrants, consistent with migrants facing considerable uncertainty about their income in northern Italy.