The core methods in today's econometric toolkit are linear regression for statistical control, instrumental variables methods for the analysis of natural experiments, and differences-in-differences methods that exploit policy changes. In the modern experimentalist paradigm, these techniques address clear causal questions such as: Do smaller classes increase learning? Should wife batterers be arrested? How much does education raise wages? Mostly Harmless Econometrics shows how the basic tools of applied econometrics allow the data to speak.In addition to econometric essentials, Mostly Harmless Econometrics covers important new extensions--regression-discontinuity designs and quantile regression--as well as how to get standard errors right. Joshua Angrist and Jorn-Steffen Pischke explain why fancier econometric techniques are typically unnecessary and even dangerous. The applied econometric methods emphasized in this book are easy to use and relevant for many areas of contemporary social science.

 An irreverent review of econometric essentials
 A focus on tools that applied researchers use most
 Chapters on regression-discontinuity designs, quantile regression, and standard errors
 Many empirical examples
 A clear and concise resource with wide applications

/pdf/mostly-harmless-econometrics-3v96x4yjch.pdf

Mostly harmless econometrics

This paper undertakes an assessment of a rapidly growing body of economic research on financial literacy. We start with an overview of theoretical research which casts financial knowledge as a form of investment in human capital. Endogenizing financial knowledge has important implications for welfare as well as policies intended to enhance levels of financial knowledge in the larger population. Next, we draw on recent surveys to establish how much (or how little) people know and identify the least financially savvy population subgroups. This is followed by an examination of the impact of financial literacy on economic decision-making in the United States and elsewhere. While the literature is still young, conclusions may be drawn about the effects and consequences of financial illiteracy and what works to remedy these gaps. A final section offers thoughts on what remains to be learned if researchers are to better inform theoretical and empirical models as well as public policy.

/pdf/the-economic-importance-of-financial-literacy-theory-and-17mb1g4cfb.pdf

The Economic Importance of Financial Literacy: Theory and Evidence

A detailed review of the education sector in Australia as in the data provided by the 2006 edition of the OECD's annual publication, 'Education at a Glance' is presented. While the data has shown that in almost all OECD countries educational attainment levels are on the rise, with countries showing impressive gains in university qualifications, it also reveals that a large of share of young people still do not complete secondary school, which remains a baseline for successful entry into the labour market.

/pdf/education-at-a-glance-m5vl7o68j5.pdf

Education at a Glance

The theory of precautionary saving is shown in this paper to be isomorphic to the Arrow-Pratt theory of risk aversion, making possible the application of a large body of knowledge about risk aversion to precautionary saving, and more generally, to the theory of optimal choice under risk In particular, a measure of the strength of precautionary saving motive analogous to the Arrow-Pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving, and to give a new interpretation of the Oreze-Modigliani substitution effect

Precautionary Saving in the Small and in the Large

This paper undertakes an assessment of a rapidly growing body of economic research on financial literacy. We start with an overview of theoretical research, which casts financial knowledge as a form of investment in human capital. Endogenizing financial knowledge has important implications for welfare, as well as policies intended to enhance levels of financial knowledge in the larger population. Next, we draw on recent surveys to establish how much (or how little) people know and identify the least financially savvy population subgroups. This is followed by an examination of the impact of financial literacy on economic decision making in the United States and elsewhere. While the literature is still young, conclusions may be drawn about the effects and consequences of financial illiteracy and what works to remedy these gaps. A final section offers thoughts on what remains to be learned if researchers are to better inform theoretical and empirical models as well as public policy. (JEL A20, D14, G11, I20, J26)

/pdf/the-economic-importance-of-financial-literacy-theory-and-2yhcozat6n.pdf

The economic importance of financial literacy: theory and evidence

Ill health and retirement in Britain: a panel data-based analysis.

This paper evaluates a United Kingdom pilot study designed to test whether a means-tested conditional cash transfer paid to 16- to 18-year-olds for staying in full-time education is an effective way of reducing the proportion of school dropouts. The transfer's impact is substantial: In the first year, full-time education participation rates increase by around 4.5 percentage points while the proportion receiving two years of education increases by around 6. 7 percentage points. Those receiving the full payment have the largest initial increase in participation and some evidence is found suggesting that part of the effect can be explained by liquidity constraints.

https://www.jstor.org/stable/pdfplus/20648921.pdf

Conditional Cash Transfers and School Dropout Rates

In this paper we use the two waves of the British Retirement Survey (1988/1989 and 1994) to quantify the relationship between socioeconomic status and health outcomes. We find that, even after conditioning on the initial health status, wealth rankings are important determinants of mortality and the evolution of the health indicator in the survey. For men aged 65 moving from the 40th percentile to the 60th percentile in the wealth distribution increases the probability of survival by between 1.0 and 1.9 percentage points depending on the measure of wealth used. A similar effect is found for women of between 1.1 and 1.3 percentage points. In the process of estimating these effects we control for nonrandom attrition from our sample.

Mortality, health status and wealth

Robin Boadway is David Chadwick Smith Chair in Economics at Queen’s University in Canada, a Fellow of the Royal Society of Canada, and an Officer of the Order of Canada. He is President Elect of the International Institute of Public Finance and a past President of the Canadian Economics Association. He is Editor of the Journal of Public Economics and former Editor of the Canadian Journal of Economics. His work has focused on taxation and redistribution, fiscal federalism, and applied welfare economics. His books include Welfare Economics, Public Sector Economics, and Fiscal Federalism (forthcoming).

/pdf/taxation-of-wealth-and-wealth-transfers-2jajeqptdp.pdf

Taxation of wealth and wealth transfers

NHS spending in England may have more than doubled in real terms since 1999/2000, but the prospects for future funding now look bleak. Although there is consensus that the NHS faces a tough financial future, there is no agreement about just how cold the financial climate will be. Starting with a look at historical funding for the NHS, The King's Fund and the Institute for Fiscal Studies set out three plausible future funding scenarios and their consequences. The paper concludes with an assessment of each scenario and the options for funding up to 2017.

/pdf/how-cold-will-it-be-prospects-for-nhs-funding-2011-2017-45605b2t2w.pdf

Carl Emmerson

Papers

Ill health and retirement in Britain: a panel data-based analysis.

Conditional Cash Transfers and School Dropout Rates

Mortality, health status and wealth

Taxation of wealth and wealth transfers

How cold will it be? Prospects for NHS funding: 2011- 2017