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RSF Review

The Complications of Choosing Affordable Health Care

Rohan Mascarenhas, Harvard Kennedy School
October 14, 2013

Last week, the federal government unveiled its online health insurance marketplace, a milestone in the implementation of the Affordable Care Act. While much of the media coverage has focused on the technical glitches of the online portal—thousands of Americans reported long wait times, for example—a more fundamental policy question is at stake. The Obama Administration has argued that presenting insurance plans to consumers in one place and in a transparent fashion will spur competition among insurers, lower costs, and ultimately improve satisfaction. But what do we actually know about how consumers choose their health insurance plans? The stakes are high: If consumers choose wrongly, they may incur higher costs and premiums, and the federal government, which will subsidize these plans, may end up footing a larger bill. In this case, more competition may not lead to lower health care costs.
 
A new paper, published with the support of the Russell Sage Foundation, provides worrying evidence that consumers choosing health insurance are often prone to errors, over-confidence, and cost biases. The authors, Eric Johnson, Tom Baker, and Ran Hassin and their colleagues, used a model of the online health exchanges to test consumer decision-making. They asked subjects to pick a health insurance plan for a family of three, with a particular number of doctor visits and out-of-pocket health care costs over the next year. The results were dismal: When asked to choose among four plans, subjects selected the cost-effective option only 42 percent of the time, with the average error costing over $200. When presented eight options, subjects selected the correct option 21 percent of the time.

Holder's Announcement a Good Small Step

Steven Raphael and Michael A. Stoll, Russell Sage Foundation
October 11, 2013

Steven Raphael is Professor of Public Policy at the University of California, Berkeley. Michael A. Stoll is Professor of Public Policy at the University of California, Los Angeles. They are the authors of Why Are So Many Americans in Prison?, a new book published by the Russell Sage Foundation that analyzes the shocking expansion of America’s prison system and illustrates the pressing need to rethink mass incarceration in this country.
 
Attorney General Eric Holder’s announcement last month that federal prosecutors will no longer seek stiff mandatory minimum sentences for low-level drug offenders marks a momentous shift in U.S. sentencing practices. After three decades of state and federal policy makers ratcheting up the severity of punishment for felony offenders, this is perhaps the most high profile example of policymakers across the country reevaluating the merits of these unusually harsh sentences. This is a welcome shift in policy that hopefully will be followed by state legislators across the country.

How the War on Poverty Still Helps Families with Children: An Interview with Jane Waldfogel

October 3, 2013

Legacies of the War on Poverty, a new book co-edited by Martha Bailey and Sheldon Danziger (Russell Sage Foundation, September 2013), offers a timely assessment of the War on Poverty, highlighting some remarkable policy successes of President Johnson’s antipoverty reforms in the 1960s—many of which still form the basis of the social safety net as we know it today. As we approach the fiftieth anniversary of Johnson’s 1964 State of the Union address—the speech in which he declared an “unconditional war on poverty”—we will feature research and additional author insights from the book in an ongoing Q&A series on the RSF blog.
 
Our first interview is with Jane Waldfogel, professor of social work and public affairs at the Columbia University School of Social Work and author of the chapter “The Safety Net for Families with Children.” Waldfogel’s research examines the lasting effects of War on Poverty initiatives for low-income families with children, focusing on three enduring areas of the Johnson administration’s efforts to provide support for poor families, including food assistance benefits, cash welfare, and employment-contingent income support. A policy brief on the research from her chapter can be found here.
 
Q. Your chapter in Legacies of the War on Poverty illustrates the success of Food Stamps-SNAP in reducing food insecurity and lowering poverty rates (when using the Supplemental Poverty Measure). Yet, the House recently passed a bill that would cut SNAP by almost $40 million. What kinds of political shifts have occurred between the start of the War on Poverty and today that would account for this dramatic turn?

RSF Behavioral Economics Roundtable Member Colin Camerer Named 2013 MacArthur Fellow

September 25, 2013

Colin Camerer, Robert Kirby Professor of Behavioral Economics at the California Institute of Technology, has been named one of the MacArthur Foundation’s 2013 Fellows. Camerer is a founding member of the Russell Sage Foundation's Behavioral Economics Roundtable as well as a former RSF Visiting Scholar.
 
The Roundtable is one of the major activities of the Russell Sage Foundation’s Behavioral Economics research program. Made up of 28 prominent behavioral economists, including Camerer, the Roundtable currently sponsors three main activities: a small grants program for younger scholars undertaking behaviorally oriented research; a two-week summer workshop taught by Roundtable members for graduate students and junior faculty interested in entering this new interdisciplinary field; and a book series in a behavioral economics, of which Camerer is co-editor. Camerer is the author of Behavioral Game Theory and the co-editor of Advances in Behavioral Economics, both co-published with Princeton University Press.

Confronting the Critics: We Haven't Lost the War on Poverty

September 18, 2013

Yesterday the U.S. Census Bureau released the annual official poverty rate, which measured 15.0% in 2012 and represented 46.5 million people living at or below the poverty line­­. According to the Census report, real median household income and the poverty rate has remained static since 2011.
 
This year, the annual report coincides with an ongoing political battle in Congress over the Supplemental Nutrition Assistance Program (SNAP), or food stamps. A bill introduced by the House GOP seeks to cut the program by more than $40 billion over a span of ten years. The food stamps program, which served approximately 48 million low-income Americans last year, dates back to the Johnson administration's War on Poverty, a sweeping set of federal initiatives that laid the groundwork for much of the current aid available to low-income individuals and families.
 
Given the persistently high poverty rate in the U.S., is it accurate to say that the nation has lost the War on Poverty? In an op-ed in today’s New York Times, RSF President Sheldon Danziger, co-editor of the recent book Legacies of the War on Poverty, explains why looking at the official number alone may be misleading. Contrary to the claims of Congress members like Representative Paul Ryan, Danziger notes, the antipoverty programs established during the 1960s have in fact delivered significant and effective relief to low-income populations. The official poverty rate measures only cash income. But if non-cash benefits such as food stamps and earned-income tax credits are taken into account when assessing federal efforts to help the poor, the poverty rate drops significantly—down to about 11%. According to Danziger, “Lowering poverty means both recognizing the successes of safety net programs we now have and devising new policies that can spread the gains generated by economic growth.”

RSF President Sheldon Danziger on the Release of the Annual U.S. Poverty Statistics

Sheldon Danziger, Russell Sage Foundation
September 17, 2013

The Annual Census Bureau report released today (September 17, 2013) shows no meaningful changes in poverty, earnings, or median household income. This is because between 2011 and 2012 the unemployment rate fell only slightly and there was no significant growth in weekly earnings (as reported by the Bureau of Labor Statistics).
 
Poverty is higher today than it was in 2000 and household incomes are lower. The “lost decade” is likely to turn into “two lost decades,” because poverty will fall substantially in the next 5 years only if two factors are at work. First, the economy must continue to expand and the unemployment rate must fall to 5 percent. Second, government policies must do more to help those among the poor and near-poor who have been left behind by economic growth in recent decades.
 
If safety net programs are targeted to balance the budget, as House Republicans have proposed, poverty will increase. Even if the safety net is not cut back, the prospects for reducing poverty are dim. The only bright spot is that private sector employment has been increasing, but it is not that bright since many of the new jobs pay low wages.
 
In addition, government has contributed to increased poverty. The federal sequestration, the end of extended unemployment insurance benefits and the failure to expand spending on early education programs or infrastructure projects has reduced demand. And, state and local governments have increased poverty by laying off teachers, police and other workers.
 
Even if poverty should start falling in the coming year as the economy grows, it is likely to take more than 5 years just to reach the rate achieved in the late 1990s. Given the status quo in the economy and in public policy, we will continue to get disappointing news about the poverty rate from the Census Bureau each September.

Announcing the 2013-2014 RSF Scholars

September 12, 2013

This month the Foundation welcomes nineteen new scholars into our building to spend the academic year. During their time in residence, these scholars will pursue research and writing projects that reflect the Foundation’s commitment to strengthening the social sciences and applying research more effectively to important social problems.

This year’s class of scholars, who have arrived from institutions across the globe, includes a working group on economic inequality that will analyze differences in school achievement among children of different socioeconomic status in Australia, Canada, the United Kingdom, and the United States. Other researchers will undertake projects ranging from investigations into restrictions on immigrants’ access to social welfare, to psychology research on self-control, to analyses of community violence across three different countries. Working within one of the Foundation’s core programs on Social Inequality, Immigration, and Cultural Contact—or performing independent research—our 2013-2014 scholars will investigate diverse sections of the social sciences in ways that promise to impact policy decisions and social life in the US.

RSF at ASA 2013

July 17, 2013

The 108th Annual Meeting of the American Sociological Association (ASA) will take place in New York City, from August 10 to 13, 2013. The theme this year, “Interrogating Inequality: Linking Micro and Macro,” asks: What is inequality, why is it, how does it come about, and what can we do to change it? ASA President Cecilia Ridgeway and the 2013 Program Committee have put together an exciting program that will include more than 600 individual sessions on everything from the latest and greatest books in the field, section roundtables, and countless other topics.

Among the twelve books that will be discussed at the Author Meets Critics Sessions are three Russell Sage publications:

  • American Memories: Atrocities and the Law (Rose Series in Sociology, 2011), by Joachim Savelsberg and Ryan King
    Scheduled Time: Sun Aug 11 2013, 2:30 to 4:10pm
    American Memories rigorously examines how the United States remembers its own and others’ atrocities and how institutional responses to such crimes, including trials and tribunals, may help shape memories and perhaps impede future violence. For more information on this session, click here.
  • Social Movements in the World System: The Politics of Crisis and Transformation (2012), by Jackie Smith and Dawn Wiest
    Scheduled Time: Mon Aug 12 2013, 10:30 to 12:10pm
    In Social Movements in the World-System, Smith and Wiest show how transnational activism since the end of the Cold War, including United Nations global conferences and more recently at World Trade Organization meetings, has shaped the ways groups organize. For more information on this session, click here.
  • Counted Out: Same-Sex Relations and American's Definitions of Family (2010), by Brian Powell, Catherine Bolzendahl, Claudia Geist, and Lala Carr Steelman
  • Scheduled Time: Tue Aug 13 2013, 10:30 to 12:10pm
    Counted Out demonstrates that American definitions of family are becoming more expansive, but finds that the standard bearer for public conceptions of family continues to be a married, heterosexual couple with children. For more information on this session, click here.

Learning More About Trust

July 16, 2013

In the July 2013 issue of Contemporary Sociology, Jessica L. Collett reviews our book, Whom Can We Trust? (2009). Edited by Karen S. Cook, Margaret Levi, and Russell Hardin, the volume was published as part of the Foundation's series on trust, which aimed to improve our understanding of the role of trust and trustworthiness in establishing cooperative behavior in a variety of settings. Collett praises the volume for "generating an interdisciplinary dialogue" on this crucial subject:

The editors do a wonderful job setting the stage for the cross-disciplinary exploration of trust and trustworthiness in the introduction.They highlight the rich history of trust and its multidisciplinary roots and set forth the current collection's thesis: social scientists and policymakers must step back from touting the virtues of trust and try to better understand the sources and corollaries of such trust and trust's implications across social contexts.

[...]

With contributions from sociologists, economists, political scientists, psychologists, and others, this collection illustrates the expansive hold that trust has taken across social science disciplines. It accomplishes the main goal the authors set forth, to add nuance to our understanding of trust and to consider the contextual nature of both trust and trustworthiness. It also highlights the need for more interdisciplinarity in research. While there is a bit of cross-disciplinary dialogue in this volume, there could be more, and there certainly should be in future research. Cook, Levi, and Hardin paved the way for such endeavors.

How the Great Recession Had (At Least Some) Positive Effects on Young People

Jean M. Twenge, San Diego State University
July 11, 2013

With support from our Great Recession initiative, Jean M. Twenge and Patricia Greenfield have examined whether and how young Americans' values and behaviors have changed in response to the recession. In this blog post, Professor Twenge discusses some of the main findings of their research project.

Amid the massive unemployment, widespread foreclosures, and economic pain of the Great Recession is a possible upside: More young people looking outside themselves.

In her previous research and theorizing, my co-author Patricia M. Greenfield of UCLA found that greater economic resources lead to focusing on the individual self, whereas more modest economic means lead to focusing on the community and the society as a whole. Thus, the widespread economic deprivation of the Great Recession was a natural experiment to test this theory. Dr. Greenfield’s graduate student, Heejung Park, took the lead on the project. We drew from a nationally representative sample of about half a million high school seniors – known as Monitoring the Future (MtF) – conducted annually since 1976.

For an initial look, we compared high school students’ values and behaviors in three eras: 1976-1978 (the earliest three years of the MtF survey), 2004-2006 (the recent, pre-recession era), and 2008-2010 (the recession era.) Previous research had shown that concern for others (for example, thinking about social problems and contributing to an international relief fund) and environmental concern (making an effort to save energy and help the environment) declined between the 1970s and the 2000s.

But then, during the recession years, concern for others and environmentalism increased, reversing the previous trend. Although these community-oriented views and behaviors did not return to where they were in the 1970s, just a few years of a severe recession turned around trends that had built for decades. For example, 36% of recession-era students said they were willing to take a bike or mass transit instead of driving, compared to 28% in 2004-2006 and 49% in 1976-78. Sixty-three percent of recession-era youth said they made an effort to turn the heat down at home in order to save energy, compared to 55% before the recession. Thirty percent of recession-era students said they thought about social problems quite often, up from 26% before the recession, and 43% of recession-era students said they thought it was important to “correct social and economic inequalities,” compared to 38% before the recession.